Current assets increase-accounts payable increase with sales

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The Acme Corp has a balance sheet as of the end of the year as follows: Cash $ 5,000 Accounts payable $15,000 Accounts receivable 20,000 Notes payable 10,000 Inventories 40,000 Total current liabilities. Total current assets $ 65,000 Long-term debt 30,000 Fixed assets, net 50,000 Stockholders' equity 60,000 Total assets $115,000 Total liabilities and equity $115,000 Last year, the firm had sales of $150,250. This year the company expects sales to increase 25 percent, to generate earnings after tax of $17,250, and to pay a dividend of $5,000. Hudson operated its fixed assets at 85 percent capacity last year. What additional financing will be needed to support the sales increase (Assume all current assets increase and accounts payable increase with sales

Reference no: EM131072147

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